[Received the assent of His Highness the Rajpramukh on the 9th day of April, 1955].An Act to provide for the incorporation and establishment of a Board for encouraging and organising Khadi and Village Industries in Rajasthan.
Be it enacted by the State Legislature of Rajasthan in the Sixth Year of the Republic of India as follows:-

Chapter I

Preliminary

1. Short title, extent and commencement. - (1) This Act may be called the Rajasthan Khadi and Village Industries Board Act, 1955.
[(a) It extends to the whole of the State of Rajasthan.]
(2) It shall come into force at once.
(3) As from the 1st day of February, 1959, it shall cease to have effect in the territories, which, immediately, before the 1st November, 1956, were comprised in the Sironj sub-division of Kotah District in the State of Rajasthan.
2. Interpretation. - (1) In this Act, unless the context otherwise requires-

(i) a banking company as defined in section 5(c) of the Banking Regulation Act, 1948 (Central Act 10 of 1949);

(ii) Reserve Bank of India as established by the Reserve Bank of India Act, 1934 (Central Act 11 of 1934) and a scheduled bank as defined in the said Act;

(iii) State Bank as constituted under the State Bank of India Act, 1955 (Central Act 23 of 1955), including its subsidiary banks as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (Central Act 38 of 1959);

(iv) a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Central Act 5 of 1970); and

(v) such other banking or financing institution as the State Government may, by notification in the Official Gazette, specify as a commercial bank for the purposes of this Act.]

(d) "Village Industries" includes such industries as may be recommended from time to time by the Khadi and Village Industries Board appointed by the Central Government and such other industries, as may be determined by the Board to be village industries.

Establishment and constitution of Rajasthan Khadi and Village Industries Board

3. Establishment and incorporation. - (1) As soon as may be after the coming into force of this Act, the State Government, shall, by a notification in the [Official Gazette] establish for the purposes of this Act a Board to be called the Rajasthan Khadi and Village Industries Board.
(2) The Board shall be a body corporate by the name aforesaid, having perpetual succession and a common seal with power to acquire, hold and dispose of property, both movable and immovable, to contract and to do all things necessary for the purposes of this Act and shall by the said name sue and be sued through its Secretary.
[4. Composition - The Board shall consist of the following-

(a) A Chairman, who shall be a non-official to be nominated by the State Government, and

(b) Twelve other members to be appointed by the State Government of whom at least eight shall be non-ofiicial members.]

5. [Vice-Chairman]. - (1) The Vice-Chairman of the Board shall be elected, by the Non-official members of the Board from amongst themselves in the prescribed manner.
(2) Subject to the provisions of sub-section (3), the Vice-Chairman shall hold office so long as he is a member of the Board.
(3) The Vice-Chairman may resign his office by a letter addressed to the Chairman of the Board, or may be removed by a resolution passed by majority of the non-official members of the Board of which not less than fourteen clear days' notice shall be given to all non-official members.
6. Functions of the Chairman and Vice-Chairman. - (1) The Chairman shall exercise such powers and discharge such duties as may be conferred on him by or under this Act.
(2) The Vice-Chairman shall exercise such of the powers and discharge such of the duties of the Chairman, as may be prescribed or as may be delegated to him by the Board.
7. Term of office of members. - The term of office of members, other than ex-officio members of the Board shall be such as may be prescribed.
8. Executive and other committees. - (1) The Board may constitute an Executive Committee consisting of not more than five members including [the Chairman and] the Vice-Chairman of the Board, to exercise such powers and discharge such duties as the Board may determine by regulations or as may be prescribed.
(2) The [Chairman] of the Board shall be ex-officio Chairman of the Executive Committee.
(3) Subject to such restrictions, if any, as may be prescribed, the Board may constitute other Standing Committees or ad hoc Committees for exercising any power or discharging any duty of the Board or for enquiring into or reporting and advising on any matter which the Board may refer to them.
(4) A Standing Committee shall consist exclusively of members of the Board.
(5) An ad hoc committee may include persons who are not members of the Board, but their number shall not exceed one-half of its strength.
[8A. Financial Adviser. - The State Government shall appoint a person not being a member to be a Financial Adviser to the Board, who shall exercise such powers and perform such duties as may be prescribed.]
9. Secretary. - (1) The State Government shall appoint a Secretary to the Board who shall exercise such powers and perform such duties as may be prescribed or as may be delegated to him by the Board or the Chairman.
(2) The Secretary shall be an officer of the Board, whole time or part time as the State Government may direct.
[10. Allowance to non-official members. - The Chairman and non-official members of the Board shall be paid from the fund of the Board such allowances as may be prescribed].
11. Resignation. - Any member other than an ex-officio member of the Board may, at any time, resign his office by giving notice thereof in writing to the State Government and, on such resignation being accepted by the State Government, shall be deemed to have vacated his office.
12. Disqualification for appointment on the Board. - (1) A person shall be disqualified for being appointed or for continuing as a member of the Board, if he-

(a) holds any office or place of profit under the Board,

(b) Is found to be a lunatic or becomes of unsound mind,

(c) is, or at any time has been, adjudicated insolvent or has suspended payment of his debts or has compounded with his creditors,

(d) has directly or indirectly by himself, by his wife or son, or by any partner, any share or interest in any subsisting contract or employment with, by or on behalf of the Board, or

(e) is a Director or a Secretary or a Manager or other salaried officer of any incorporated company or any co-operative society which has any share or interest in any contract or employment with, by or on behalf of the Board.

(2) (a) A person shall not, however, be disqualified under clause (a) of sub-section (i) by reason only of his being a member receiving allowance as provided in section 10,

(b) a person shall not be disqualified under clause (d) or (e) of sub-section (1) or be deemed to have any share or interest in any contract or employment within the meaning of those clauses by reason only of his, or of the incorporated company or of a cooperative society of which he is a Director, Secretary, Manager or other salaried officer having, a share or interest in any newspaper in which any advertisement relating to any affairs of the Board is inserted;

(c) a person shall not also be disqualified under clause (d) or (e) of sub-section (1) or be deemed to have any share of interest in any contract or employment with, by or on behalf of the Board by reason only of his being a shareholder of a company oi society having any such share or interest as is referred to in either of those two clauses:

Provided that such person discloses to the State Government the nature and extent of the share held by him from time to time.
13. Removal of members. - (1) The State Government may remove from the Board any member, other than an ex-officio member, who, in its opinion:-

(a) refuses to act; or

(b) has become incapable of acting; or

(c) has so abused his position as a member as to render his continuance on the Board detrimental to the interests of the public; or

(d) is absent without permission from all the meetings of the Board for four successive months or for the period in which three successive meetings are held, whichever period is longer; or

(e) ceases to reside in Rajasthan; or

(f) is otherwise unsuitable to continue as a member.

(2) The State Government may suspend any member pending an inquiry against him in connection with his proposed removal.
(3) No order of removal under sub-section (1) shall be made unless the member concerned has been given an opportunity to submit his explanation to the State Government with reference to the grounds of his proposed removal.
(4) A member who has been removed under sub-section (1) shall not be eligible for appointment as a member of the Board.
(5) The State Government may declare void any transaction in connection with which a member has been removed under sub-section (1).
14. Filling in vacancies. - When a member other than an ex-officio member dies, or resigns under section 11 or is removed under section 13, or when any member is subject to any of the disqualifications specified in section 12, he shall cease to be a member of the Board, and any vacancy so occurring shall be filled in by the State Government as early as practicable:
Provided that during any such vacancy the continuing members may act as if no vacancy had occurred.
15. Vacancy or defect not to invalidate proceedings. - No act or proceeding of the Board under this Act shall be questioned on the ground merely of the existence of any vacancy in, or defect in the appointment of a member or in the constitution of the Board:
Provided that the Board shall not act or take any proceeding at any time when, by reason of any vacancy occurring, the number of continuing non-official members is less than one-half of the total number of such non-official members in the Board.
16. Meetings of the Board. - The Board shall from time to time make such arrangements with respect to the date, time, place, notice, management and adjournment of its meetings as may be determined by regulations made by the Board, subject to the following provisions viz:-

(a) ordinary meetings shall be held once at least in every three months,

(b) the Chairman may, whenever he thinks fit, call special meetings,

(c) the proceedings of the meetings of the Board shall be forwarded to the State Government in the department concerned.

23. Transfer of property by Government to Board. - The State Government may transfer to the Board, any building, land or any other property, movable or immovable, for use, and management by the Board on such conditions and limitations, as the State Government may deem fit, for the purposes of this Act.
24. Expenditure and contracts made before establishment of Boards. - All debts and expenditure incurred, all contracts entered into and all matters and things engaged to be done by with or for the State Government, in connection with or for the purposes of this Act before and up to the date of the establishment of the Board shall be deemed to have been incurred, entered into or engaged to be done by, with or for the Board, and all suits and other legal proceedings instituted by or against the State Government in respect thereof shall be instituted or continued by or against the Board, as the case may be.
25. Contracts by the Board. - All contracts to which the Board is party shall be signed by the Secretary on its behalf.
26. Fund of the Board. - (1) The Board shall have its own fund and the all receipts of the Board shall be credited thereto and all payments by the Board shall be made therefrom.
[(2) The Board may-

for all or any of the purposes of this Act.]
(3) All moneys belonging to the fund of the Board shall be deposited in such manner as may be prescribed.
(4) Accounts of the Board in banks shall be operated upon by such officers of the Board jointly or individually as may be authorised by the Board.
27. Application of fund and property. - All property, fund and other assets with the Board shall be held and applied by it subject to the provisions, and for purposes of this Act.
[27A. Power to advance loans and sanction grants and subsidies. - The Board may, for the purpose of effectively carrying out its functions under the Act, advance loans and disburse grants and subsidies, to such persons or class of persons engaged in the promotion and development of khadi and Village Industries, and on such terms and conditions, out of the funds received by it from the State Government or the Commission, as may be prescribed or specified by the State Government or the Commission, as the case may be].
28. Annual programme and establishment schedule. - (1) In each year, on such date as may be prescribed, the Board shall prepare and forward-

(a) a programme of the work for the next year; and

(b) a schedule of the staff of officers and servants already employed and to be employed during the next year, to the State Government in such form as may be prescribed.

(2) The programme shall contain:-

(a) particulars of the schemes which the Board proposes to execute whether in part or whole, during the next year;

(b) particulars of any work or undertaking which the Board proposes to organise during the next year for the purposes of carrying out its functions under the Act; and

(c) such other particulars as may be prescribed.

(3) The State Government may approve and sanction the programme and the schedule of the staff of officers and servants forwarded to it with such modifications, if any, as it deems fit, and the modifications so made shall be binding on the Board.
29. Budget. - The Board shall, on such date as may be prescribed, prepare and submit to the State Government in the prescribed form the budget for the next financial year, showing the estimated receipts and expenditure on capital and revenue accounts according to the programme and schedule of the staff sanctioned by the State Government.
30. Sanction of budget. - (1) The State Government may sanction the budget submitted to it with such modifications, if any, as it deems proper.
(2) The Board shall be competent to reappropriate such amounts as may be necessary from one scheme to another or within sub-heads and minor heads, subject to the condition that the cost of any scheme shall not exceed the amount originally sanctioned by the State Government by more than 33-1/3 per cent, without the approval of the State Government.
31. Supplementary programme and budget. - The Board may submit a supplementary programme and a supplementary budget for the sanction of the State Government in the prescribed form and the provisions of sub-section (2) of section 28 and sections 29 and 30 shall apply to such supplementary programme and supplementary budget respectively.
32. Annual Reports. - The Board shall prepare and forward to the State Government in such manner as may be prescribed an annual report within three months after the end of the financial year, giving a complete account of its activities during the previous financial year.
33. Further reports, statistics and returns. - The Board shall, before such date and at such intervals and in such manner as the State Government may from time to time direct, submit to the State Government reports on such matters and statistics and returns as the State Government may require.
34. Accounts and audits. - (1) The accounts of Board shall be maintained and an annual statement of accounts shall be prepared in such manner as may be prescribed.
(2) The accounts of the Board shall be audited by a chartered accountant or by such persons as the State Government may direct.
(3) As soon as the accounts of the Board are audited, the Board shall send a copy thereof together with a copy of the report of the audit thereto to the State Government.
[(3-A) The State Government shall, as soon as may be, after the receipt of the said statement and the report, cause them to be laid on the Table of the House of the State Legislature, and the said statement and the Report shall be open to discussion thereon, but shall not be subject to vote.]
(4) The audited accounts of the Board shall be submitted to the State Government in such manner as may be prescribed.
(5) The Board shall comply with such directions as the State Government may, after the report of the audit, think fit to issue.
[34A. Recovery of sums due to Board. - All sums of money due to the Board on any account whatsoever shall, without prejudice to any other remedy provided by law, be recoverable as arrears of land revenue.
34B. Power to write off irrecoverable losses. - The Board may write off such irrecoverable losses up to five hundred rupees in each case, subject to an annual limit of five thousand rupees, and in such circumstances and subject to such conditions and restrictions as may be prescribed; cases for such losses exceeding the aforesaid amounts shall be referred to the State Government for orders.]

Chapter VI

Miscellaneous

35. Directions by State Government. - (1) In the discharge of its functions the Board shall be guided by such instructions on question of policy as may be given to it by the State Government.
(2) If any dispute arises between the State Government and the Board as to whether a question is or is not a question of policy, the decision of the State Government shall be final.
36. Members, officers and servants to be public servants. - The members, officers and servants of the Board, whether appointed by the State Government or by the Board, shall be deemed, when acting or purporting to act in pursuance of any of the provisions of this Act, to be public servants within the meaning of section 21 of the Indian Penal Code, 1860 (XLV of 1860).
37. Rules. - The State Government may, by notification in the [official Gazette] make rules for carrying out the purposes of this Act, and, in particular, and without prejudice to the generality of the foregoing provision, such rules may provide for any matter which is to be or may be prescribed.
38. Power to make regulations. - The Board may, with the previous sanction of the State Government, make regulations consistent with this Act and the rules made thereunder:-

(a) regulating its own procedure and the procedure of its committees, including the Executive Committee.

(b) defining the powers of the Secretary and other officers of the Board, and

(c) providing for any matter on which regulations are to be or may be made under this Act.

39. Repeal. - (1) The Rajasthan Khadi and Village Industries Board Ordinance, 1955 (Rajasthan Ordinance 3 of 1955) is hereby repealed.
(2) Notwithstanding such repeal anything done or any action taken under any provision of the said Ordinance and in force immediately before the commencement of this Act shall, in so far as the same could have been done or taken under this Act, be deemed to have been done or taken under the corresponding provision of this Act as if this Act were in force on the day on which such thing was done or action was taken, until it is modified or superseded by a competent authority under this Act.

Notifications

S. 6(1)[Notification No. 676/F, 6(26) 1/56, dated 18-12-1957; published in Rajasthan Gazette Part IV-C, dated 9-1-1958; page 888]. - In pursuance of the provisions of section 37 read with section 6(1) of the Rajasthan Khadi and Village Industries Board Act, 1955, the Governor has been pleased to invest the Chairman of the Board or any authority subordinate to him if so delegated by the Chairman, with the following powers:-
To make appointments in connection with the affairs of the Board, on all such posts, the maximum of the pay scales of which does not exceed Rs. 180/- p.m.
[Notification No. F. 25(23) Ind./A/64. dated 26-11-1970; published in Rajasthan Gazette Part IV C, dated 26-11-1970; page 428].G S.R. 221. - In exercise of the powers conferred by sub-section (1) of S. 6 read with sub-section (1) of Section 35 of the Rajasthan Khadi & Village Industries Board Act (No. 5 of 1955), the State Government hereby orders that in supersession of all previous orders in this behalf, the following powers shall be exercised by the Chairman of the Board, with immediate effect:-

1. The Chairman shall preside over the meeting of the Khadi Board and its executive and the standing Finance Committee.

2 The Chairman shall be responsible for the proper functioning of the Board and the implementation of its decisions and discharge of its duties under the Act.

3. Subject to such delegation, as may be made under the Act or Rules made thereunder, the Chairman shall:-

(a) cause the important papers and matters to be presented to the Board as early as practicable;

(b) issue directions as to the method of carrying out the decision of the Board;

(c) maintain or cause to be maintained on account the receipt and expenditure of the Board; and

(d) present a draft Annual Report of the working of the Board to the Board for approval and submit the report as approved by the Board to the Government.

4. The Chairman shall exercise administrative control over all departments and officers of the Board.

5. In cases of emergency, the Chairman may provisionally sanction sums upto Rs. 25,000/-in each case. Such sanctions however, will have to be ratified in the meeting of the Standing Committee or the Board within a period of one month.

6. The Vice-Chairman shall exercise the powers of the Chairman in his absence.

Order

[No. F. 6(3) Ind/A/57, dated 13-9-1965; Published in Rajasthan Gazette Extraordinary Part IV-C, dated 14-10 1965; page 325 328].
In pursuance of Section 27-A of the Rajasthan Khadi and Village Industries Board (Amendment) Act, 1964 (No. 26 of 1964), the Governor of Rajasthan is pleased to approve the terms and conditions contained in the Annexure to govern the re-loaning of funds given to the Rajasthan Khadi and Village Industries Board by the Khadi and Village Industries Commission for the development of Khadi and village industries.

Annexure

Terms and conditions for re-loaning the amounts received by the State Boards from the Khadi and Village Industries Commission

1. Loans shall be granted to the following institutions or persons only:

(i) A co-operative society registered under the Rajasthan Cooperative Societies Act, 1953 (Rajasthan Act 4 of 1953) or under any law for time being in force in any State.

(ii) A society registered under the Rajasthan Societies Registration Act, 1958 (Rajasthan Act 28 of 1958) or under any other law for the time being in force in any State.

(iii) A trust created for public purposes of charitable or religious nature.

(iv) A Gram or Village Panchayat established under any State law for the time being in force.

(v) An authority set up under any law for the time beii lg in force relating to bhoodan or gramdan.

(vi) An individual or institution engaged in khadi and/or village industries subject to the condition that the loan to an individual or to an institution should not exceed the ceiling amounts that may be fixed by the Commission from time to time.

(vii) Any other individual, authority or body with the prior approval of the Commission.

2. Loans shall be granted for the very purposes and patterns, which have been or may be sanctioned by the Commission and they will be for the promotion of khadi and/or village industries as specified in the Schedule appended to the Khadi and Village Industries Commission Act, 1956, as amended from time to time.
3. Loans will be granted within the limits that will be specified or fixed by the Commission from time to time.
4. Loans will carry such interest as will be prescribed by the Commission from time to time.
5. Loans shall be repaid within such period and in such installments as may be prescribed by the State Government from time to time in respect of the loans advanced by the Khadi and Village Industries Commission to institution, etc.
6. Before advancing loans to the borrower as defined in Cl. (1) above, the State Boards shall get executed by the borrower legal documents, that is hypothecation deed and/or mortgage deed covering movable/immovable properties as security for the loan applied for.
In case these securities are not available or are found to be inadequate, the borrower shall furnish sureties acceptable to the State Board. In case, the State Board is satisfied that it is not possible for the borrower to fulfil any of the aforesaid conditions, he shall agree to mortgage the entire assets which may be existing at the time the loan is granted or which may be created thereafter from funds obtained by him from the State Boards as grants and/or loans from time to time. The borrower shall also certify that after the loan has been fully utilised the assets created out of the loans and grants received from the State Board shall constitute a full security against the loan applied for the term "assets" shall also include sale proceeds and other cash balance held by the borrower. Loans shall be a first charge on all assets created out of the loan and/or grants received from the State Boards. In case the existing assets are already subject to a charge against a prior loan received by the borrower from any other sources, the loans granted by the State Boards shall be a second or subsequent charge on such existing assets.
7. At the end of the first financial year and every subsequent year of the currency of the loan the State Boards shall satisfy the Commission that the loan has been utilised for the purposes for which it is sanctioned.
8. Accounts of individual loans & advances shall be maintained by the State Boards in such forms as may be prescribed by the Commission from time to time and shall be submitted within six months of closing of the financial year or as and when demanded by the Commission.
9. As soon as it is ascertained that any loan is irrecoverable the State Board shall report the fact to the Commission and take all necessary steps for its recovery. The State Boards shall follow the Commission's instructions regarding action to be taken in this behalf. It will be the responsibility of State Board to recover all the loans. A copy of each of the reports regarding irrecoverable loans received by the Commission from the various State Boards from time to time should be forwarded by the Commission to the Deputy Director of Audit, F.R.B.C.S. & M., Bombay.
10. In any legal document to be executed by the borrower, institution or person, in favour of the State Board a power of attorney shall be given the State Board, Commission and any of the officers of the State Board and also of the Commission by the borrower, institution or person so that in the event of default in payment of loan amount by the institution or person it shall be open for the constituted attorneys to take steps to realise the amount and enforce the security.
11. The insurance policies in respect of the mortgaged properties or hypothecated goods shall be endorsed in favour of the Commission.
12. An Authentic copy of the legal document duly signed and sealed by the borrower institution as well as the State Board shall be sent by the State Board to the Commission within the period of one month from the date of its execution.
S. 4(2)[Notification No. F. 4(56) FD/Gr. IIV 82-6, dated 16-8-1983; published in Rajasthan Gazette Part IV-C, dated 16-8-1983; page 65-66].S.O. 74. - In exercise of the powers conferred by sub-section (2) of section 4 of the Rajasthan Sales Tax Act, 1954 (Rajasthan Act No. 29 of 1954) and in supersession of this Department Notification No. F. 4(21) FD/Gr. IV/78-2, dated 6-3-78, the State Government being of the opinion that it is expedient in the public interest to do so, it hereby exempts with immediate effect from tax the sale or purchase of the goods as mentioned in the Schedule below on the following conditions:-

1. That the said goods are recorded in the registration certificate of the dealer claiming exemption.

2. That the recommendations of the Khadi and Village Industries Commission constituted under the Khadi and Village Industries Commission Act of 1956 (Central Act 61 of 1956) or Rajasthan Khadi and Village Industries Board Act, 1955 (Rajasthan Act 5 of 1955) are produced before the concerning assessing authority.

Schedule

(1) Cotton punies, sliver, raw and processed wool, knitting wool and leaf;
(2) All carding, spinning, weaving, warping, silver making and hosiery making apparatus and appliances relating to the production of Khadi or hosiery goods and spare parts of such apparatus and appliances, including saranjam, ambar charkha and spare parts thereof;
(3) Hand-spun and hand-woven khadi and yarns made of cotton, wool, silk or any other natural fibres of animal hair or of mixture of any two or all of them;
(4) Ready made garments and other articles made of Khadi including razais, gaddas, pillows and hand-bags and jerseys, sweaters, socks and hand-gloves made of hand spun and hand-woven woollen yarn;
(5) The processed or manufactured in the State of the following village industries as defined in the khadi and Village Industries Commission Act, 1956 (Central Act 61 of 1956):-

1. Bee keeping;

2. Cottage Match Industry;

3. Cottage Pottery Industry excluding bricks;

4. Cottage Soap Industry;

5. Flaying, curing and tanning of hides and skins and ancillary industries connected with the same and cottage leather industry;

6. Ghani Oil Industry;

7. Hand made paper;

8. Manufacture of can-gur and Khandsari;

9. Palm-gur making and other palm products industry;

10. Processing cereals and pulses;

11. Manufacture and use of manure and methane gas grom cowdung and other waste products (such as flesh of dead animals, night soil, etc.);

12. Manufacture of Shellac;

13. Collection of forest plants and fruits for medicinal purposes;

14. Fruit processing and fruit preservation;

15. Bamboo and cane work;

16. Black-smithy excluding iron and steel furniture;

17. Carpentry excluding the wooden furniture;

18. Fibre other than coir;

19. Manufacture of house hold utensils in aluminium;

20. Manufacture of Katha; and

21. Manufacture of gum resins.

Explanation. - For the purposes of this notification "Khadi" means any cloth woven on handloom in India from cotton, silk or woollen or natural fibre of animal hair yarn handspun in India or from the mixture of any two or all of such yarns.

Reduction in Stamp Duty

[Notification No. D. 8946/F. 2(33) E & T, dated 26-3-1957; published in Rajasthan Gazette Part IV B, dated 4-4-57, page 8].
In exercise of the powers conferred by section 9 of the Indian Stamp Act, 1899 (Central Act No. 11 of 1899) as adapted in Rajasthan under the Rajasthan Stamp Law (Adaptation) Act, 1952, (Rajasthan Act No. VII of 1952), the Government of Rajasthan is pleased to reduce by 50% (Fifty percent) the stamp duty payable on the agreements and mortgage deeds executed in favour of All India Khadi & Village Industries Board in connection with the advance of Loan by the said board for small scale industries.